Insight: SDN & NFV Growth Depends on vCPE, Performance Management Improvements

Posted by Mae Kowalke on Thursday, June 11, 2015 with No comments

Over the past few years, adoption of Software Defined Networking (SDN) and Network Functions Virtualization (NFV) has dramatically changed the networking landscape, and it’s also transforming the entire IT infrastructure landscape.

In a recently published report, SDxCentral examined this topic, with a comprehensive analysis of factors influencing SDx technology uptake, and predictions that:

  • Combined revenue of SDx initiatives will exceed $105 billion per year by 2020
  • SDx will influence almost 80% of purchasing decisions by the end of 2020
  • SDx will soon affect just about every customer segment in the networking space

For the first time in more than a decade, there is significant market opportunity for new vendors, driven by three factors: IT organizations are converging, purchasing decision makers are tending to have weaker ties to incumbent vendors, and cloud providers are quickly becoming a major consumer of network technology.

As shown in the graph below, SDxCentral reports that the top three SDN and NFV use case categories so far are Network Virtualization ($28 billion) Virtual Core and Aggregation ($20 billion) and Virtual Customer Edge at ($18 billion).

SDx market spend graph from page 12 of SDxCentral's report,

However, continued momentum for SDN and NFV is contingent on improvements being made to SDx technology and its use--especially for NFV, where early deployments suffered from performance issues. Several factors contributed to those problems:

  1. Virtualization infrastructure focused only on isolating boundaries between virtual machines, without advanced resource management.
  2. Unpredictable performance across NFV infrastructure.  
  3. ‘Noisy neighbor’ issues with co-located VMs taking up all the resources and leaving none for critical network function.

Although significant progress has been made with number 1 above, vendors need to do more work on number 2 and 3 before network operators will feel comfortable migrating from proprietary hardware to NFV solutions.

For now, massive SDN and NFV deployments are still limited to large enterprises like Google and Facebook, but early uptake is emerging across many verticals including education and finance. This is a once-in-a-generation transformation with far-reaching consequences.

Read the full report for more insights into the SDx market.
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